MIRA INFORM REPORT

Report Date :

15.02.2007

IDENTIFICATION DETAILS

Name :	UNICHEM LABORATORIES LIMITED
Registered Office :	Unichem Bhavan, Prabhat Estate, Off S V Road, Jogeshwari (West), Mumbai – 400 402, Maharashtra
Country :	India
Financials (as on) :	31.03.2006
Date of Incorporation :	22.08.1962
Com. Reg. No.:	11-12451
CIN No.:	U99999MH1962PTC012451
TAN No.: (Tax Deduction & Collection Account No.)	MUMU00030C
Legal Form :	Subject is a public limited liability company. The company’s shares are listed on Stock Exchanges.
Line of Business :	Manufacture and sale of Pharmaceutical Products such as formulations in forms of Tablets / Capsules, Syrups, Injections, Eyemides, Ointments and Powder, Transfusions, Protein Foods, Bulk Drugs and Chemicals.

RATING & COMMENTS

MIRA’s Rating :

A

RATING		STATUS	PROPOSED CREDIT LINE
56-70	A	Financial & operational base are regarded healthy. General unfavourable factors will not cause fatal effect. Satisfactory capability for payment of interest and principal sums	Fairly Large

Maximum Credit Limit :	USD 12000000
Status :	Good
Payment Behaviour :	Regular
Litigation :	Clear
Comments :	Subject is a well-established and reputed company in pharmaceutical industry. Available information indicates high financial responsibility of the company. Financial position of the company is good. Business is active. The company’s payments are always correct and as per commitments. The company can be considered good for any normal business dealings. It can be regarded as a promising business partner in a long-run.

LOCATIONS

Registered Office/ Corporate Office :	Unichem Bhavan, Prabhat Estate, Off S V Road, Jogeshwari (West), Mumbai – 400 402, Maharashtra
Tel. No.:	91-22-26780643 / 26785616
Fax No.:	91-22-26784391
Email :	info@unichemindia.com
Website :	http://www.unichemindia.com
Factory 1 :	Ø 99, MIDC Area, Roha, District Raigad – 402 116, Maharashtra Tel. No. 91-2194-263561/263549 Ø Plot No. 17 and 18, Pilerne Industrial Estate, Pilerne Bardez, Goa – 403 515 Tel. No. 91-832-2407202-6 Ø C-31-32, Industrial Area, Meerut Road, Ghaziabad – 173 205, Uttar Pradesh Tel. No 91-120-2750039-46 Ø Bhatauli Kalan District, Solan, Baddi – 173 205, Himachal Pradesh Tel. No. 91-1795-246701-6 Ø Pithampur, Plot No 197, Sector – I, Pithampur –454775, MP
Overseas office:	Located at: St. Bolshaya Yakimanka Hno 31/18, Moscow, Russia Tel. No. +7 095 2302380 Fax. No. +7 095 2387934 E-mail. unichemindia@mail.ru 2/1, Kruglouniversityskya, Office No. 3, Ukraine, Klev – 012024 Tel. No. +380 44 235 24 04/4280160
Research and Development Centers :	I.MUMBAI Unichem Bhavan.Prabhat Estate, Off S.V. Road, Jogeshwari (West), Mumbai 400 102 2. BANGALORE Unichem Bioscience R&D Center, SID, Indian Institute of Science, Bangalore 560 012 3. GOA Pilerne Industrial Estate Pilerne, Bardez, Goa - 403 515

DIRECTORS

Name :	Dr. Prakash A. Mody
Designation :	Chairman and Managing Director
Date of Birth/Age :	53 years
Qualification :	M Sc, PHD DMM
Experience :	30 years
Date of Appointment :	22.06.1974
Last Employment :	Uni-Distributors Private Limited
Name :	Mr. B. K. Sharma
Designation :	Executive Director
Date of Birth/Age :	66 years
Qualification :	M Com, DPM
Experience :	44 years
Date of Appointment :	29.09.1969
Last Employment :	Atlay cycle India
Name :	Mr Ramdas Gandhi
Designation :	Non-Executive Director
Name :	Mr Nasser Munjee
Designation :	Non-Executive Director
Name :	Mr Anand Mahajan
Designation :	Non-Executive Director
Name :	Mr Prafull Anubhai
Designation :	Non-Executive Director
Name :	Mr Prafull Sheth
Designation :	Non-Executive Director

KEY EXECUTIVES

Name :	Mr. Ashok Jain
Designation :	Chief Executive- Pharma
Date of Birth/Age :	49 years
Qualification :	M sc, MBA (IIM)
Experience :	18 years
Date of Appointment :	01.07.1991
Last Employment :	Lupin Laboratories Limited
Name :	Mr. Vinod K. Behl
Designation :	Chief Executive-API
Date of Birth/Age :	56 years
Qualification :	B Sc (Chemical Engineering)
Experience :	36 years
Date of Appointment :	09.08.1997
Last Employment :	Ranbaxy Laboratories Limited
Name :	Dr. D. N. Naik
Designation :	Vice President – Technical
Name :	Dr. P. Nandkumar
Designation :	Vice President- Human Resource
Name :	Mr. Rajeev Lamba
Designation :	Vice President – International Business
Date of Birth/Age :	44 years
Qualification :	B Sc
Experience :	23 years
Date of Appointment :	01.07.1999
Last Employment :	Zydus Cadila Limited
Name :	Mr. Rakesh Parikh
Designation :	Vice President – Finance
Name :	Dr. P. B. Deshpande
Designation :	Vice President – Chemical Research and Development
Date of Birth/Age :	49 years
Qualification :	M Sc, Phd, DBM
Experience :	22 years
Date of Appointment :	28.01.2004
Last Employment :	Orchid Chemicals Limited
Name :	Mr. K. Subharaman
Designation :	General Manager (Legal) and Company Secretary
Name :	Mr. V Vijayendran
Designation :	Vice President – Pharma Marketing
Date of Birth/Age :	47 years
Qualification :	B Sc, MMM
Experience :	26 years
Date of Appointment :	03.05.2003
Last Employment :	Ranbaxy Europe Limited
Name :	Mr R S Shapeti
Designation :	Advisor – API
Date of Birth/Age :	56 years
Qualification :	B E PGDMA (IIMA)
Experience :	32 years
Date of Appointment :	01.07.2005
Last Employment :	Biotech Synergy Limited

MAJOR SHAREHOLDERS

Share Holding Pattern as on 31.12.2006

Category of Shareholders		No. of Shares	Percentage of Share holding
A] Shareholding of promoter and promoter group
1] Indian
	a. Individuals / Hindu Undivided Family	7020406	19.50
	b. Central government / State government(s )	0	0.00
	c. Bodies Corporate	9948182	27.63
	d. Financial institutions/ Banks	0	0.00
	e. Any other Trustee	104272	0.29
2] Foreign
	a. Individuals (Non-Resident Individuals/ Foreign Individuals)	0	0.00
	b. Bodies Corporate	0	0.00
	c. Institutions	0	0.00
	d. Any other	0	0.00
Sub - Total		17072860	47.42
B] Public Shareholding
1] Institutions
	a. Mutual funds / UTI	2062068	5.73
	b. Financial Institutions / Banks	12688	0.04
	c. Central Government / State Government(s)	0	0.00
	d. Venture Capital Funds	0	0.00
	e. Insurance companies	2510155	6.97
	f. Foreign Institutional Companies	1030512	2.86
	g. Foreign venture capital Investors	0	0.00
	h. Any other
	I] Foreign Banks	200	0.00
2] Non-Institutions
	a. Bodies Corporate	554231	1.54
	b. Individuals
	I] Individuals shareholders holding normal share capital up to Rs 0.100 Millions	9172601	25.48
	II] Individual shareholders holding nominal share capital in excess of Rs 0.100 Millions	1516960	4.21
	c. Any other
	I] Foreign companies	1924553	5.35
	II] Directors being not promoter	108768	0.30
	III] Directors Relatives	39804	0.11
Sub-Total		18932540	52.58
Total		36005400	100.00

BUSINESS DETAILS

Line of Business :

Manufacture and sale of Pharmaceutical Products such as formulations in forms of Tablets / Capsules, Syrups, Injections, Eyemides, Ointments and Powder, Transfusions, Protein Foods, Bulk Drugs and Chemicals.

Products :

ITC Code	300410.06
Product Description	Ampicillin and Cloxacillin in Capsules, Injections, etc.

ITC Code	300420.07
Product Description	Rifampicin Formulations

ITC Code	293329.02
Product Description	Metronidazole, Metronidazole Benzoate and other Salts
ITC Code	300490.05
Product Description	Losartan Potassium in Tablets
ITC Code	300490.13
Product Description	Alprazolam in Tablets

Exports to :

Africa, C.I.S., China, Vietnam and UK

PRODUCTION STATUS

Particulars	Units	Installed Capacity	Actual Production
Tablets / Capsules	Nos. in lakhs	2006 – 34676 2005 – 25676	2006 – 18373 2005 – 17108
Syrups	Litres	2006 – 960000 2005 – 960000	2006 – 62543 2005 – 60109
Injections	Litres	2006 – 90000 2005 – 90000	2006 – 17556 2005 – 29232
Eyemides, Ointments and Powder	Kilograms	2006 – 223800 2005 – 223800	2006 – 103284 2005 – 133468
Bulk Drugs and Chemicals	Kilograms	2006 – 631110 2005 – 595610	2006 – 526040 2005 – 516595

GENERAL INFORMATION

No. of Employees :	1600
Bankers :	Ø Bank of India Ø The Sakura Bank Limited

Banking Relations :	Good
Auditors :	N A Shah and Associates Chartered Accountants
Address :	64,65 and 84-C, Mittal Tower, Narima Point, Mumbai - 400021
Associates :	Ø Chevy Investment and Finance Private Limited Ø M. Investment Private Limited Ø Noble Medicure Private Limited Ø Pranit Finance and Investment Company Private Limited Ø Raigad Pharmaceuticals Limited Ø Rudra Pharma Distributors Ø Uni Trust Ø Uni-Distributors Private Limited (MM Labs) Ø Viramrut Investment Private Limited Ø UCB Pharma Limited Ø Gravure Art & Healthcare Limited Ø Central Drug Research Institute, Lucknow, Uttar Pradesh Ø Indian Institute of Chemical Technology, Hyderabad, Andhra Pradesh Ø Institute of Microbial Technology, Chandigarh Ø AVM Investment Private Limited
Subsidiaries:	Ø Unichem Global Holdings Limited Ø Niche Generics Limited, U.K. 1 the Cam centre, Wilbury Way, Hitchin Hertfordshire – SG40TW, UK Tel. No :+44[0] 1462633804 Ø Unichem SA Pty Limited Adrian Building, 1^st floor, 32-34, Klinkenberg Road, Van Der Hoff Park, Potchefstrrom, Post Boxe – 20434, Noordburg, South Africa – 2522 Tel : (+2718) 2974055 / 0823361954 Fax No: (+2718) 2974059 Ø Unichem Pharmaceuticals (USA) Incorporation Sherbrooke Office Centre II, 201, West Passaic Street, Suite c 301, A, Rochelle Park, New Jersey – 07662 USA Tel No: 001 201 2260240 Fax : 001 201 2260241 Ø Uncihem Farmaceuticals Do Brasil Ltda (Brazil) Rua Ramos Barista 152, Andar 12, CEP 04552020 Vila Olimpia Sao Paulo - Brazil
Representative Office :	Unichem Laboratories Limited, RUSSIA Saint Bolshaya Yakimanka, Hno 31/18, Moskow, Russia Tel. No. : 007 095 2387934 / 2302380 Country Head – Mr Pundari Baba E-Mail : unichemindia@col.ru Unichem Laboratories Limited, Kazakhstan Room No: 728, Seventh Floor, Furmanova Street, 50 City: Almaty, Kazakhstan. Tel: 007-3272-734488 Country Business Manager - Dr. Praveen Kumar Reddy Email: pkanumuru@yahoo.com Unichem Laboratories Limited, UKRAIN Kiev 01014, strutinskogo St. 8, 4^th Floor, Office 12, Kiev Ukraine Telefax : 00380445024590 Country Business Manager : Doctor Rajith Puthen E-Mai : unichem_kiev@yahoo.com, rajithputhen@yahoo.co.in Unichem Laboratories Limited, SOUTH AFRICA Plot No. 74, Fadama Road, South Industrial Area, P O Box 3368, Accra. Ghana. Tel:+233 21 684183/665625 Telefax:+233 21 665625 Country Business Executive Narendra Kumar Email: narendra_unichem@rediffmail.com

CAPITAL STRUCTURE

Authorised Capital :

No. of Shares	Type	Value	Amount
70,000,000	Equity Shares	Rs. 5/- each	Rs. 350.000 millions
20,000,000	Unclassified Shares	Rs. 5/- each	Rs. 100.000 millions
5,000,000	Preference Shares	Rs. 10/- each	Rs. 50.000 millions
	Total		Rs. 500.000 millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
33,003,300	Equity Shares	Rs. 5/- each *	Rs. 180.020 millions

Note (*) includes

1) 450,000 Equity Shares of Rs. SI- each alloted as fully paid up pursuant to a contract without payment

being received in cash.

2) 29,390,000 Equity Shares of Rs.5/-each issued as bonus Shares by Capitalisation of General Reserve.

3) 1,330,000 Equity Shares of Rs. SI- each alloted pursuant to the scheme of Amalgamation of Unisearch

Limited and Unichem Exports Limited with the Company without payment being received in cash.

4) Call in arrears amounting to Rs Nil ( Previous Year Rs 175) due from members other than Directors.

5) Outstanding Employee stock option exercisable into 78700 Equity shares; (Previous year Nil)

FINANCIAL DATA

[all figures are in Rupees Millions]

ABRIDGED BALANCE SHEET

SOURCES OF FUNDS	31.03.2006	31.03.2005	31.03.2004
SHAREHOLDERS FUNDS
1] Share Capital	180.02	170.600	170.600
2] Share Application Money	0.000	0.000	0.000
3] Reserves & Surplus	2826.09	1655.620	1340.120
4] (Accumulated Losses)	0.000	0.000	0.000
NETWORTH	3006.110	1826.220	1510.720
LOAN FUNDS
1] Secured Loans	104.670	258.320	228.830
2] Unsecured Loans	178.160	180.080	248.560
TOTAL BORROWING	282.830	438.400	477.390
DEFERRED TAX LIABILITIES	240.140	225.140	187.340
TOTAL	3259.080	2489.760	2175.450
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]	1780.500	1420.260	1198.440
Capital work-in-progress	100.480	365.820	72.330
INVESTMENT	274.930	31.090	142.580
DEFERREX TAX ASSETS	0.000	0.000	0.000
CURRENT ASSETS, LOANS & ADVANCES
Inventories	597.460	540.800	472.570
Sundry Debtors	956.560	711.450	657.290
Cash & Bank Balances	436.150	18.950	26.770
Other Current Assets	0.000	0.000	0.000
Loans & Advances	219.400	189.910	240.430
Total Current Assets	2209.570	1461.110	1397.060
Less : CURRENT LIABILITIES & PROVISIONS
Current Liabilities	595.310	652.450	519.480
Provisions	241.090	136.170	115.480
Total Current Liabilities	836.400	788.620	634.960
Net Current Assets	1373.170	672.490	762.100
MISCELLANEOUS EXPENSES	0.000	0.000	0.000
TOTAL	3529.080	2489.760	2175.450

PROFIT & LOSS ACCOUNT

PARTICULARS	31.03.2006	31.03.2005	31.03.2004
Sales Turnover [including other income]	4599.620	4026.340	3555.850
Profit/(Loss) Before Tax	949.340	627.750	524.770
Provision for Taxation	115.000	180.420	145.850
Profit/(Loss) After Tax	834.340	447.330	378.920
Export Value on FOB basis	890.620	591.180	411.260
Import Value	89.400	88.360	64.050
Total Expenditure	3784.150	3398.590	3031.070

QUARTERLY / SUMMARISED RESULTS

Particulars	30.06.2006 1^st Qtr	30.09.2006 2^nd Qtr	31.12.2006 3^rd Qtr
Sales Turnover	1369.300	1432.900	1313.200
Other Income	35.000	23.900	7.500
Total Income	1404.300	1456.800	1320.700
Total Expenditure	1073.700	1118.300	1041.900
Operating Profit	330.600	338.500	278.800
Interest	4.100	6.000	5.700
Gross Profit	326.500	332.500	273.100
Depreciation	28.600	28.700	29.300
Tax	46.300	46.900	52.00
Reported PAT	251.600	256.900	191.800

200606 Quarter 1 --------------- NOTES: 1.The above results were reviewed by the audit committee and taken on record by the Board of Directors of the company in its meeting held on 27th July 2006. 2.Segmen reporting: Primary Segment The company has only one segment i.e 'Pharmaceuticals' Secondary Segment (By Geographical Segment) Sales & Operating Income Three months Three months Year ended ended 30.06.2006 ended 30.06.2005 31.03.2006 India 1113.971 1050.253 3841.179 Outside India 303.263 172.683 935.882 TOTAL 1417.234 1222.936 4777.061 (figures in Millions) In view of the interwoven/intermix nature of the business and manufacturing facility, other segmental information is not ascertainable. 3.Previous years figures have been regrouped and reclassified wherever necessary. 4.The Extra-ordinary gain represents net consideration for sale of immovable property. 5.The statutory auditors of the company have carried out a limited review of the financial results of the company for the quarter ended 30.06.2006. 6.The company received 10 investor complaints during the quarter ended 30.06.2006 which have been disposed off during the said quarter. There were no complaints at the beginning and end of the said quarter.

200609 Quarter 2 --------------- Notes: Expenditure Includes (Increase)/Decrease in Closing stock of Finished & Semi-Finished Goods Rs (15.941) million Consumption of Raw /Packing Materials Rs 370.200 million Purchase of Finished Goods Rs 265.369 million Staff Cost Rs 146.177 million Other Expenditure Rs 352.249 million Tax Indicates Provision for Taxation (Including Deferred & Fringe Benefit Tax) EPS is Basic Status of Investor Complaints for the quarter ended September 30, 2006 Complaints Pending at the beginning of the quarter Nil Complaints Received during the quarter 40 Complaints disposed off during the quarter 40 Complaints unresolved at the end of the quarter Nil 1. The above results were reviewed by the Audit Committee and taken on record by the Board of Directors of the Company in its meeting held on October 18, 2006. 2. Previous years figures have been regrouped / reclassified wherever necessary. 3. The Extra-ordinary gain represents net consideration for sale of part of immovable property. 4. The statutory auditors of the Company have carried out a Limited Review of the financial result of the Company.

200612 Quarter 3 --------------- Notes EPS is Basic Status of Investor Complaints for the quarter ended December 31, 2006 Complaints Pending at the beginning of the quarter Nil Complaints Received during the quarter 09 Complaints disposed off during the quarter 09 Complaints unresolved at the end of the quarter Nil 1. The above results were reviewed by the Audit Committee and taken on record by the Board of Directors of the Company in its meeting held on January 18, 2007. 2. Previous years figures have been regrouped / reclassified wherever necessary. 3. The Extra-ordinary gain represents net consideration for sale of part of immovable property. 4. The statutory auditors of the Company have carried out a Limited Review of the financial results of the Company for the Quarter ended December 31, 2006.

KEY RATIOS

PARTICULARS	31.03.2006	31.03.2005	31.03.2004
Debt Equity Ratio	0.15	0.27	0.38
Long Term Debt Equity Ratio	0.12	0.22	0.33
Current Ratio	1.65	1.41	1.51
TURNOVER RATIOS
Fixed Assets	2.15	2.31	2.40
Inventory	8.35	8.33	9.05
Debtors	5.70	6.16	6.28
Interest Cover Ratio	32.52	18.75	14.04
Operating Profit Margin (%)	20.07	17.90	16.66
Profit Before Interest and Tax Margin (%)	17.66	15.69	14.49
Cash Profit Margin (%)	17.39	12.81	12.11
Adjusted Net Profit Margin (%)	14.99	10.60	9.94
Return on Capital Employed (%)	30.16	31.13	29.99
Return on Net Worth (%)	29.47	26.81	28.46

STOCK PRICES

Face Value	Rs. 5.00/- each
High	Rs. 268.40/-
Low	Rs. 264.00/-

LOCAL AGENCY FURTHER INFORMATION

Fixed Assets

Ø Freehold

Ø Leasehold

Ø Buildings

Ø Plant and Machinery

Ø Furniture Fixtures and Equipments

Ø Cars and Vehicles

Ø Patents & Trademarks

History

Incorporated in Aug.'62, the company was formed by Amrut V Mody to take over a proprietory business set up in 1944 in Bombay. Unichem Laboratories entered into an agreement with Upjohn, US, to market their high-tech products and the Unisearch division of the company was established in 1985. This division started commercial operations in Nov.'85.  

 Unichem is having its formulations manufacturing facilities at Goa, Ghaziabad (UP) and Baddi (Himachal Pradesh). Further the company's APIs manufacturing facilities are located at Roha (Maharashtra) and Pithampur (MP). 

 Unichem is having three subsidiaries viz Unichem Farmaceutics Do Brasil Ltda and Unichem S A (Proprietary) Limited are the wholly owned subsidiaries and Niche Generics Limited, a 60:40 joint venture company.  

 Unichem has carved a niche in formulations. It is also trying to provide total therapeutic options and, towards this goal, it has formed three groups. Group one includes anti-infectives, gastro-intestinal and pain management products. Group two includes cardiology, psychiatry and neurology products. The third group concentrates on women healthcare. This is how the product basket of Unichem is emerging. The company has about 17 production lines capable of producing the following category of dosages namely tablets, capsules, liquids, ampoules, injection vials and dry syrups. 

 The company forayed into health foods through a separate division with the launch of Nutreva, a soya protein supplement. The product is targetted at women. Unichem was among the First Indian companies to introduce a number of new generation Cox II inhibitors. Also the company has the distinction of First company to introduce Vetacef- a product first in the animal healthcare industry. 

 In May 2000, the company made a bonus issue in the ratio of 1:1 thereby increasing the paid-up capital to Rs 85.3 Millions. On 15 Jan 2001, the company announced the launch of sildenafil citrate, ie, Viagra, under the Erix brand name.  

 The Company's Goa plant is certified by Health Authorities of Countries like UK , South Africa and Australia. The Company's Baddi Plant is also approved by South Africa and inspected by UK Authorities. Unichem established a subsidiary in Brazil to build its business in the Latin American region. It also received CoS from Europe for some of its products. 

 During 2004-05 the company has commissioned a new product development center exclusively for the developed markets. Further the company has set up its second formulations plant at Baddi and this has commenced its production in April 2005. The company has also planned to set up two more formulations plant at Baddi. 

 The company has acquired the assets of Bulk Drugs Facility at Indore from ICICI Bank on March 28, 2005. This facility was earlier taken over by ICICI From M/s. Biotech Synergy Limited. 

 In May 2005 the company disposed off its old factory at Jogeshwari (West) Mumbai for a consideration of Rs.136.50 million. Further the company has set up a wholly owned subsidiary Unichem Pharmaceuticals (USA) Inc., in USA.

BUSINESS

The company was incorporated to carry on the business of manufacturer and sale of Pharmaceutical Products such as formulations in forms of Tablets / Capsules, Syrups, Injections, Eyemides, Ointments and Powder, Transfusions, Protein Foods, Bulk Drugs and Chemicals.

The company has carved a niche in formulations. Around 90% of the company’s turnover is derived from formulations and the balance comes from bulk drugs and chemicals. Over the years, the company has been able to increase doctor coverage by nearly 40% and it has broadbased its product basket through divisionalised concepts. It is also trying to provide total therapeutic options and towards this goal, it has formed three groups. Group one includes anti-infectives, gastro-intestinal and pain management products. Group two includes cardiology, psychiatry and neurology products. The third group concentrates on women healthcare. This is now the product basket of company is emerging. As much as 17% of its turnover in FY 2003 came form products introduced during the last three years.

The company is also making a foray into health foods through a separate division with the launch of Nutreva, a soya protein supplement. The product was targetted at women. Nutreva will be positioned as a product that will compensate for the lack of essential proteins in the average Indian diet.

Milestones

2002-2003 Animal Healthcare division divested

• Subsidiaries in South Africa & Brazil established
• Modernization of Ghaziabad formulations plant

2002 Established Joint Venture in UK called Niche Generics Limited

2001 New R&D Centre set up at Mumbai.

• New Biosciences R&D Centre set up at Bangalore for research work in Bio-technology

2000 Corporate Vision till 2005 unfolded

• South African Health Authority Certifications for Goa and Baddi Plants
• Bonus Issue 1:1
• UK MCA (MHRA) certification for Goa & Baddi Plants

1999 Modern Multipurpose Bulk Drug plant set up at Roha

• MOLECULAR GENERICS Division Launched

1997-2000 BaaN ERP implemented

1998 Baddi formulations plant fully operational

1997 Goa formulations plant fully operational

• New Corporate office set up at Unichem Bhavan Jogeshwari, Mumbai.

1996 Merger of Unichem Exports Limited. & Unisearch Limited. with Unichem Laboratories Limited

1994 Bonus Issue 1:2

• First major capital infusion in the Company. Private Placement of shares @ Rs. 265 premium

1993 Right issue @ Rs.40/- per share

1994-1999 Restructuring & transformation of the company inline with future growth strategies

1987 Entered Animal Health Care business

1984 UNISEARCH Limited. set up in Collaboration with Upjohn

• Unichem entered the anti-biotic segment - Ampoxin (Ampicillin & Cloxacillin combination) launched

1983 US FDA approval for Hydrochlorothiazide at Jogeshwari plant

• Anti-TB - Isoniazid, Rifampicin introduced in white tablet form for the first time in India - Anticox

1979 NEFEDIFINE - Unichem first to get clearance from Drug Authorities

1978 Bonus Issue 1:4

• Roha Bulk Drug Plant established (Backward Integration)

1976 Fine Chemicals unit at Roha was set up

1973 Unichem's Research Laboratory recognised for Phd work by Bombay University. Unichem's R&D Centre recognised by Department of Science & Technology

1972 Padma Bhushan awarded to Late Mr. Amrut Mody for his pioneering efforts in Indian Pharma Industry

1970 Backward Integration for manufacture of Anti-TB Drugs

1969 Bonus Issue 1:5

1968 Ghaziabad formulations plant setup

1963 Tie up with Uni Sankyo - Co-Marketing formulations

1962 Foreign Collaboration with UCB for bulk-drugs

• First Formulation plant at Jogeshwari
• Unichem became Public-Listed on BSE - Total Share Capital 44 lacs (October)
• OESTROGEN & Progestin combinations launched

1952 First exports of Unichem

1944 Unichem was set up by Late Mr. Amrut Mody

GLOBAL PHARMA MARKET: 

The year 2004 will be remembered as a remarkable year in the global pharmaceutical market - a year with a number of surprises - both positive and negative that indicate a greater change in pharma market over the next 3 to 5 years. 

In a broad sense, 2004 was a positive year in pharma. The size of global market reached $5506n and grew 7% capping a five-year run in which the total market grew at a 10% compound annual rate. This size and growth reflects both the ongoing demand for pharmacotherapy and the introduction of innovative drugs. Growth in the pharmaceutical market also reflects the continued unmet need for medication and demographic shifts that continue to strengthen underlying demand around the world. A recent analysis undertaken by the World Health Organization Global Burden of Disease project shows that some 60% of disability-adjusted life years (DALYs) lost to disease in industrialized countries can be attributed to three disease areas viz. neuropsychiatric, cardiovascular and malignant neoplasms. This volume is not expected to diminish over the coming 20 years. All these areas are major targets for pharma companies. 

Graph-1 represents the Top 10 Therapy Classes by Global Sales.  

Antiepileptics 2.2Erythropoietin Products 2.2Calcium Antagonists 2.2Angiotensin 2.3Antirheumatics 2.5Antipsychotics 2.7Antidepressants 3.9Cytostatics 4.6Anticulcerant 4.9Cholestorol 5.8 

 * Source: IMS Health  

 Large therapy classes with the greatest amount of growth were statins, cytostatics, angiotensin-2 inhibitors and antiepileptics. Each of these classes now exceeds $10 bn and achieved double-digit growth in 2004. As patient demand continued to soar, healthcare benefits from medications in these classes were assured and innovative molecules introduced. 

 The U.S. market grew by 7.7% in 2004 as against 11.1% in 2003. This was the first year since 1994 that the US market grew at less than 10%. The key factors causing the slowdown were 

 * the mild flu season 

 * increased use of over-the-counter proton pump inhibitors and antihistamines markets  

 * erosion of branded products by generic launches 

 * Safety concerns with Cox-2s and antidepressants and the Vioxx (rofecoxib) withdrawal. 

 In European market, the growth was steady. U.K. & Spain showed the highest growth among the top five European markets. The U.K. market grew by 8.1% whereas in Spain the growth rate was 8.5% in the year 2004. The following factors contributed to the growth of pharma market in U.K. 

 * Growth in hospital sector* Increase in sale of branded products in retail sector* Increase in Generic sales boosted by the patent expiry of several major molecules  

 Graph 2: 

 Graph 2 represents the Continent-wise distribution of Pharma Sales. 

 North America 47%Rest of Europe 2%Asia/Africa/Australia 8%European Union 28%Japan 11%Latin America 4% 

 * Source: IMS Health  

 In Brazil, the retail pharmaceutical market grew by 20.7% in 2004.  

 The following factors contributed towards this growth * Innovation evidenced by 400 new molecules and line extension. 

 * Launches of high-value end branded prescription products.  

 * Increase in sales of Generic products through market penetration  

 In Mexico, the retail pharma market grew by 8.6% in 2004. The pharma market in Mexico witnessed 

 * Increase in prices representing 70% of value growth. 

 * Entry of new companies in Generic Market. 

 * Strengthening of branded products by the existing companies. 

 Population ageing is a global phenomenon that has or will affect every man, woman and child anywhere in the world. 

 Graph 4 Represents the average annual growth rate of total population and population aged 60 or over around the world - 1950-2050. 

 The proportion of older persons was 10% in 2000 and by 2050 it is projected to reach 21 per cent. This phenomenon will affect health and health care systems. 

 INDIAN PHARMA MARKET: 

The Indian Pharmaceutical sector is highly fragmented with over 20,000 registered units. The leading 250 pharmaceutical companies control 70% of the market. The Indian Pharmaceutical Industry meets around 70% of the country's demand for bulk drugs, drug intermediates, pharmaceutical formulations, chemicals, tablets, capsules, orals and injectibles. Indian Pharmaceutical Industry ranks very high, in terms of technology, quality and range of medicines manufactured. 

 India's retail pharmaceutical market grew by 5.8% in 2004 to $4.6bn. which is represented in Graph 5. 

 This growth is driven by: 

 * Launches of new anti-infective, cardiovascular and antidiabetic drugs* Deluge of new molecules 

 Indian outfits already have the largest number of units that have been approved by the USFDA outside the US, numbering about 65.  

 While the US continues to remain the hot favourite, pharma industry's exports to Europe are also on the rise. 

 KEY DEVELOPMENTS IN INDIAN PHARMACEUTICAL SECTOR: 

 * India became compliant with product patents regime with effect from January 2005. 

 * MRP based excise regime introduced for pharmaceutical product. 

 * Value-added tax introduced. 


 UNISEARCH: 

 Unisearch operates in all the chronic therapy areas, which broadly account for 15% of the pharmaceutical industry. It also operates in fast growing segments of the market. Out of the top 5 brands of the Company, Unisearch contributes 3 brands. 

 Unisearch division launched seven new brands viz. Rostar, Lorlip, TG-TOR EZ and Corduo in lipid regulators segment; Metride Plus, Metsar in antidiabetics segment and Teram as a hypertensive. 

 The top 5 brands of this division contributing substantial turnover are: 

 I. Losar-Anti hypertensive2. Trika-Anxiolytic3. TG - TOR - Cholesterol Reducer4. Corvadil - Anti anginal - Anti hypertensive 5. Clodrel - Anticoagulant 

 UNICHEM PHARMA: 

 Unichem Pharma division operates mainly in the anti-infectives, anti-inflammatory and Gastro-enterology segments which broadly account for 42% of the pharmaceutical market. These therapeutic groups are all growing lower than the overall Pharma market and inspite of this the division has managed to maintain its position and market share. 

 Nine new products were launched during the current financial year viz. Etoxib, Lezyncet-D, Valcox Plus, Izra-D, Fixx-LB, Tuftax, Tufzone, Aroff and Vizyl. 

 The top brands of this division contributing to substantial turnover are:  

 1. Ampoxin - Anti infective 2. Unienzyme - Digestive Enzyme 3. Vizylac - Pro Biotic 4. Trinergic - Nutritional Supplement  

 NEU-FOREVA: 

 Neu Foreva is a speciality division catering to the areas of Women's healthcare and Neuropsychiatry.  

 In case of Neu-Foreva Zicam, Unicobal, Oxcazo and MirtaDep are the four products added to Neuro-Psychiatry products basket. 

 The top brands of this division contributing to substantial turnover are: 

 1. Serta - Anti depressant2. Trika SR- Anxiolytic3. C-Pram - Anti depressant4. Trika Plus/Forte - Antidepressant combination5. Uniprogestin - Hormones 

 Graph 7 Represents the comparison of Unichem's new product launches in various therapeutic category during the year 2004-05 vis-a-vis the previous financial year: 

 BRAND POSITION: 

 The five leading Unichem brands amon the top 200 brands of the industry are: 

 1. Ampoxin - Ranked 37th (last year - 34th) 2. Trika - Ranked 64th (last year - 72nd) 3. Losar - Ranked 136th. (last year - 174th) 4. Unienzyme - Ranked 144th. (last year - 158th) 5. Losar-H - Ranked 152nd (last year - 241st) 

 POWER BRANDS OF UNICHEM: 

 Graph 8 Represents the Power Brands of Unichem along with the revenue generated by them  

 * Roff has been withdrawn from the market from Oct' 04.  

REGIONAL DISTRIBUTION OF SALES: 

 In the context of the company's product mix being wide and varied, the revenue of business of the company is distributed across the length and breadth of the country. 

 Graph 9 Represents the distribution of in-market sales of the company in various zones as reported by ORG-IMS:  

 North 1440South 850East 350West 820 


 FUTURE: 

 In the years to come, Company will focus on high value added Branded Generics and the immediate focus will be on unbranded generics in Brazil. The Company will also explore the possibilities of consolidation of markets. There will be a substantial investment in Brazil & U.S. subsidiaries. The Company is also creating a reasonable base and infrastructure to launch a range of branded generics in Latam. In addition, the Company is pursuing strategic alliance with research based companies abroad for licensing in patented new drugs. Unichem also plans to set up operations in Mexico. To establish an identity in the international market, R&D activities will be strengthened. The Company would start filing ANDAs in the US in the coming year. 

 RESEARCH AND DEVELOPMENT: 

 Unichem has invested in R&D teams, dedicated to: 

 * developing new drug delivery systems * patent non-infringing process * developing recombinant proteins * cost effective process of manufacturing APIs 

 The R&D and product development centres are located at Mumbai, Bangalore & Goa. The total built up area of the Company's R&D Centres is over 13,000 sq.ft. and the technology transferred to the production units includes new produces, non-infringing process to develop API's, drug intermediates. 

 The total number of patents filed during the year was 16 of which 9 patents were for products and the rest for process taking the cumulative total to 44 patents. The Company will continue to invest in R&D focusing on the development of NDDS formulations arid working on non-infringing processes to develop generic drugs going-off patent. 

 HUMAN RESOURCE: 

 Unichem considers its employees as the most valuable asset of the company. Unichem focuses on attracting talent, retaining talent and developing talent for enhancing business performance. Various HR activities like Key Resources Investment Program (KRIP), Human Capital Index (HCI) and HR Reach Out are retained by continuous improvement and enhancement with constant alignment with their corporate objectives. 

 Employee Stock Options are an opportunity for employees to share in a Company's growth and align their interests with those of the Company. Besides being a tax efficient performance linked reward mechanism it attracts, retains and motivates talented human resources for the Company. With this aim in mind, Unichem introduced the Employee Stock Option Scheme 2004. The Scheme is administered by the Compensation Committee of the Board of Directors and is applicable to the eligible employees and eligible Directors of the Company and its subsidiaries. 

 For further details kindly refer to the disclosure made in the Directors' Report as required under the Securities and Exchange Board of India (Employees Stock Option Scheme and Employees Stock Purchase Scheme) Guidelines, 1999. 

 INTERNAL CONTROL SYSTEMS AND ADEQUACY: 

 An effective system of Internal Control is crucial in improving and building shareholder value. It helps to avoid nasty surprises, assures the adequacy of process performance, performs jobs more efficiently and improves the quality of the business. 

 The Company has an Internal Audit Department to assist the management ineffective discharge of its responsibilities by furnishing it with analysis, appraisals, recommendations and pertinent comments concerning the activities reviewed. A detailed report on the Company's Internal Control Systems and adequacy is given in the Corporate Governance section, which farms a part of this Annual Report. 

Financial Highlights

Operations

The Total Revenue increased to Rs. 4599.7 million in 2005-06 from Rs. 4054.5 million in 2004-05 at a growth rate of 13.4%. Export revenues increased to Rs. 935.9 million from Rs. 690.3 million registering a growth rate of 35.6%.The profit after tax and extraordinary gain and after prior period adjustments increased to Rs. 818.6 million in the current year from Rs. 450.9 million in the previous year,registering a growth of 81.5%.

Appropriations

Company proposes to transfer Rs. 150 million to the General Reserve. An amount of Rs. 463.3 million is

proposed to be retained in the Profit & Loss Account. financial year.

Review of performance of Subsidiaries

Company has 4 (four) subsidiaries as on March 31, 2006. Company had applied to the Government of India for an exemption from attaching the Financial Statements of its subsidiaries, since the audited consolidated financial statements are presented in the Annual Report. Company believes that the consolidated financial statements present a full and fair view of the state of affairs of Company as a whole. The Government of India has granted exemption from complying with the provisions of Section 212 of the Companies Act, 1956. Accordingly, the Annual Report does not include the financial statements of the subsidiaries. However, for the benefit of the members, Company has published a summary of the financials of the subsidiaries in the Annual Report.The financial statements of subsidiaries, along-with related information and reports are available for inspection at the registered office of the Company.

Niche Cenerics Limited

Niche GenericsLimited,a Joint Venture Subsidiary, wherein Company has a majority stake of 60%, is engaged in manufacturing formulations, product development and dossier filing in European markets. Niche Generics posted a turnover of GBP 12.3 million during the current year as compared to GBP 23.3 million during the previous year. Previous year's income includes revenue arising from one time licence fee. Niche Generics has posted a profit of

GBP 0.1 million after tax and preference dividend for the current year as against GBP 8.5 million during the previous year.

Unichem SA (Proprietary) Limited

Unichem SA (Proprietary) Limited is a wholly owned subsidiary of the Company in South Africa. This subsidiary has been set-up for business development and to own product registrations and not to carry out direct marketing operations. Accordingly, Unichem SA (Proprietary) Limited has not generated any revenues since its inception. The

Company incurred an expenditure of SA Rand 0.1 million in the current year. The Company secured 11 product

registrations in South Africa during the year 2005-06.

Unichem Farmaceutica Do Brasil Ltda.

Unichem Farmaceutica Do Brasil Ltda., is a wholly owned subsidiary of the Company in Brazil.This subsidiary has

been set-up to own product registrations, launch generic and branded generics products in the Brazilian market.

Unichem Farmaceutica Do Brasil Ltda secured 2 product registrations in Brazil during the year 2005-06. The

Company plans to have its own set-up for sales, marketing, warehousing and distribution.The Company incurred an

expenditure of Reais 1.1 million in the currentyearasagainstReaisO.1 million during the previous year.

Unichem Pharmaceuticals (USA) Inc.

Unichem Pharmaceuticals (USA) Inc., a wholly owned subsidiary of the Company in USA, has been set up for

business development, filing of own ANDA's and exploring opportunities for marketing alliances in North American markets.The Company is in its development stage and has not generated any revenues since inception. The Company incurred an expenditure of US$ 0.4 million during thecurrent year.

Fixed Deposits

The total amount of Fixed Deposits as at March 31, 2006 was Rs. 9.4 million. There are no overdue deposits except unclaimed deposits amounting to Rs. 1.5 million as on March 31,2006,out of which none of the deposits have since been renewed and deposits amounting to Rs.0.9 million have been repaid to 12 (Twelve) depositors.

The company is in trade terms with :-

· U. P. Organics

· Ambika Parentals Containers

· Sterling Chemicals and Alchohol Private Limited

· Valiant Chemical Corporation

· Virdev Intermediates Private Limited

· Puraj Chemicals Limited

· Malwa Oxygen & Ind Gases Private Limited

· Sima Products

· RSG Packaging Private Limited

· Akash Gases and Chemicals Private Limited

· Deepak Industries

· Jayson Ammonia and Chemicals Private Limited

· Novaplast Industries Private Limited

· Sima Chemicals

· Solvent process glass equipments

· Span Chemicals

PRESS RELEASE

Unichem Q3 FY06 Total Income at Rs. 1140.76 million and Net profit at

Rs. 185.77 million

BSE: 506690

NSE: UNICHEMLAB

Reuters: UNLB.BO

Bloomberg: UN@IN

Roha, January 18, 2006:

KEY HIGHLIGHTS:

Ø Sales at Rs.1118.56 million as against Rs.972.99 million in Q3 FY05; YoY

growth of 14.9 %.

Ø Net profit after tax is at Rs. 185.77 million as against Rs.93.02 million in Q3

FY05; YoY growth of 99.7 %.

Ø Diluted EPS of Rs.21.76 as against Rs.10.88 in Q3 FY05 on annualize basis.

PRESS RELEASE

Subsidiaries of Unichem

Niche Generics Limited, their United Kingdom subsidiary recorded sales of GBP 3.71

million for Q3 FY06 as compared to GBP 2.43 Million during Q3 FY05.

General Information

Board of Directors has also allotted and issued 600 equity shares of Rs. 5/- each pursuant

to the exercise of the stock options by the eligible employees/legal heirs under the

Employee Stock Option Scheme – 2004 of the Company.

About UNICHEM

Unichem Laboratories Limited is an Indian pharmaceutical company with vertically integrated

operations. The company develops, manufactures and markets a wide range of pharmaceutical

products in India and overseas. Unichem produces and markets finished dosage formulations and active pharmaceutical ingredients in anti-infective, cardiovascular, psychiatry and neurology, musculo-skeletal, gastro-intestinal, nutritional, anti-allergic and other therapeutic areas. Unichem is also involved in research and development of new drug delivery systems and development of non-infringing process for active pharmaceutical ingredients. Website:

http://www.unichemindia.com/

For further information contact Santosh Kumar Nair at +91–22-26782398 or at investor relations@unichemindia.com at Unichem Laboratories Limited.

This press release includes forward-looking statements. The company have based these forward-looking

statements on their current expectations and projections about future events. Such statements

involve known and unknown risks, uncertainties and other factors that may cause actual results to differ materially. Such factors include, but are not limited to, changes in local and global economic conditions, their ability to successfully implement their strategy, the market acceptance of and demand for their products, their growth and expansion, technological change and their exposure to market risks. By their nature, these expectations and projections are only estimates and could be materially different from actual results in the future.

Secured Loans	31.03.2006	31.03.2005	31.03.2004
Term Loans from Banks and Financial Institutions	100.370	131.500	131.500
Cash Credit, Packing Credit, Demand Loans from Bank	4.300	126.810	126.820
Total	104.670	258.310	258.320
Unsecured Loans
Fixed Deposits :-
Fixed Deposits from Director	0.250	0.250	0.250
Others (Repayable within one year Rs. 26.670 millions, previous year Rs. 5.510 millions)	7.570	34.860	34.860
Short Term Loans and Advances
Overdraen book balance in current account with Banks	3.550	10.470	0.000
Long Term			35.110
Other Loans	166.790	144.970	144.970
Total	178.160	190.550	180.080

Unichem Lab to set up facility in Ireland

C H Unnikrishnan / Mumbai December 16, 2006

After raising its stake to 100% in UK JV; the firm plans to expand European portfolio with new products.

The Mumbai-based Unichem Laboratories, after closing the remaining 40 per cent acquisition in the UK joint venture company Niche Generics, is planning to set up an additional formulation packaging facility in Ireland.

The new UK facility is to accommodate the expansion of Niche's product portfolio with new products from the Indian company.

P A Mody, chairman and managing director, Unichem Lab told Business Standard that since the UK company has already become a wholly owned subsidiary of Unichem, there will be more investments from the company to expand the European generics market.

The new packaging facility will be the first such investment. With this, the company will be able to expand the product basket of Niche Generics immediately by exporting a range of new active pharma ingredients (APIs) from its facilities in India.

However, Mody declined to comment about the size of investments in Europe including the new facility in Ireland. Niche Generics has its manufacturing facility in Ireland at present.

This week, Unichem had raised its equity in Niche Generics to 100 per cent from the original 60 per cent. The total investment for the remaining 40 per cent equity acquisition in the company is not disclosed.

Unichem had acquired 60 per cent stake in Niche Generics in 2002. This UK joint venture company was engaged in developing, marketing and selling of generic pharmaceutical products in European Union countries.

Mody said that Unichem expects accelerating exports to Northern and Central European markets after the UK company became its wholly owned subsidiary. It is expected to post at least 20 per cent revenue growth for the year to March 2007, he added.

Unichem currently exports active pharmaceutical ingredients and formulations to more than 25 countries, expects exports to rise by 50 per cent to Rs 1.4 billion in this financial year compared to 35.6 per cent rise last year.

The company is also currently looking at expanding its domestic portfolio by acquiring/licensing leading brands from international companies.

"We are in talks with a few players in the country and abroad but the details are confidential at this point of time as the valuation process is still not concluded." Mody said.

CMT REPORT [Corruption, Money laundering & Terrorism]

The Public Notice information has been collected from various sources including but not limited to: The Courts, India Prisons Service, Interpol, etc.

1] INFORMATION ON DESIGNATED PARTY

No exist designating subject or any of its beneficial owners, controlling shareholders or senior officers as terrorist or terrorist organization or whom notice had been received that all financial transactions involving their assets have been blocked or convicted, found guilty or against whom a judgement or order had been entered in a proceedings for violating money-laundering, anti-corruption or bribery or international economic or anti-terrorism sanction laws or whose assets were seized, blocked, frozen or ordered forfeited for violation of money laundering or international anti-terrorism laws.

2] Court Declaration :

No records exist to suggest that subject is or was the subject of any formal or informal allegations, prosecutions or other official proceeding for making any prohibited payments or other improper payments to government officials for engaging in prohibited transactions or with designated parties.

3] Asset Declaration :

No records exist to suggest that the property or assets of the subject are derived from criminal conduct or a prohibited transaction.

4] Record on Financial Crime :

Charges or conviction registered against subject: None

5] Records on Violation of Anti-Corruption Laws :

Charges or investigation registered against subject: None

6] Records on Int’l Anti-Money Laundering Laws/Standards :

Charges or investigation registered against subject: None

7] Criminal Records

No available information exist that suggest that subject or any of its principals have been formally charged or convicted by a competent governmental authority for any financial crime or under any formal investigation by a competent government authority for any violation of anti-corruption laws or international anti-money laundering laws or standard.

8] Affiliation with Government :

No record exists to suggest that any director or indirect owners, controlling shareholders, director, officer or employee of the company is a government official or a family member or close business associate of a Government official.

9] Compensation Package :

Our market survey revealed that the amount of compensation sought by the subject is fair and reasonable and comparable to compensation paid to others for similar services.

10] Press Report :

No press reports / filings exists on the subject.

CORPORATE GOVERNANCE

MIRA INFORM as part of its Due Diligence do provide comments on Corporate Governance to identify management and governance. These factors often have been predictive and in some cases have created vulnerabilities to credit deterioration.

Our Governance Assessment focuses principally on the interactions between a company’s management, its Board of Directors, Shareholders and other financial stakeholders.

CONTRAVENTION

Subject is not known to have contravened any existing local laws, regulations or policies that prohibit, restrict or otherwise affect the terms and conditions that could be included in the agreement with the subject.

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs. 44.09
UK Pound	1	Rs. 86.59
Euro	1	Rs. 57.92

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	7
PAID-UP CAPITAL	1~10	7
OPERATING SCALE	1~10	7
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	7
--PROFITABILIRY	1~10	7
--LIQUIDITY	1~10	7
--LEVERAGE	1~10	7
--RESERVES	1~10	7
--CREDIT LINES	1~10	7
--MARGINS	-5~5	--
DEMERIT POINTS
--BANK CHARGES	YES/NO	YES
--LITIGATION	YES/NO	NO
--OTHER ADVERSE INFORMATION	YES/NO	NO
MERIT POINTS
--SOLE DISTRIBUTORSHIP	YES/NO	NO
--EXPORT ACTIVITIES	YES/NO	YES
--AFFILIATION	YES/NO	YES
--LISTED	YES/NO	YES
--OTHER MERIT FACTORS	YES/NO	YES
TOTAL		63

This score serves as a reference to assess SC’s credit risk and to set the amount of credit to be extended. It is calculated from a composite of weighted scores obtained from each of the major sections of this report. The assessed factors and their relative weights (as indicated through %) are as follows:

Financial condition (40%) Ownership background (20%) Payment record (10%)

Credit history (10%) Market trend (10%) Operational size (10%)

RATING		STATUS	PROPOSED CREDIT LINE
>86	Aaa	Possesses an extremely sound financial base with the strongest capability for timely payment of interest and principal sums	Unlimited
71-85	Aa	Possesses adequate working capital. No caution needed for credit transaction. It has above average (strong) capability for payment of interest and principal sums	Large
56-70	A	Financial & operational base are regarded healthy. General unfavourable factors will not cause fatal effect. Satisfactory capability for payment of interest and principal sums	Fairly Large
41-55	Ba	Overall operation is considered normal. Capable to meet normal commitments.	Satisfactory
26-40	B	Unfavourable & favourable factors carry similar weight in credit consideration. Capability to overcome financial difficulties seems comparatively below average/normal.	Small
11-25	Ca	Adverse factors are apparent. Repayment of interest and principal sums in default or expected to be in default upon maturity	Limited with full security
<10	C	Absolute credit risk exists. Caution needed to be exercised	Credit not recommended

PRIVATE & CONFIDENTIAL : This information is provided to you at your request, you having employed MIPL for such purpose. You will use the information as aid only in determining the propriety of giving credit and generally as an aid to your business and for no other purpose. You will hold the information in strict confidence, and shall not reveal it or make it known to the subject persons, firms or corporations or to any other. MIPL does not warrant the correctness of the information as you hold it free of any liability whatsoever. You will be liable to and indemnify MIPL for any loss, damage or expense, occasioned by your breach or non observance of any one, or more of these conditions